Sri. Sharath Kumar, Bengaluru v. Income Tax Officer, Ward- 6(2)(5), Bengaluru

ITA 1774/BANG/2019 | 2016-2017
Pronouncement Date: 29-11-2019 | Result: Allowed

Appeal Details

RSA Number 177421114 RSA 2019
Assessee PAN BGNPS9428J
Bench Bangalore
Appeal Number ITA 1774/BANG/2019
Duration Of Justice 3 month(s) 15 day(s)
Appellant Sri. Sharath Kumar, Bengaluru
Respondent Income Tax Officer, Ward- 6(2)(5), Bengaluru
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2019
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 29-11-2019
Last Hearing Date 23-10-2019
First Hearing Date 23-10-2019
Assessment Year 2016-2017
Appeal Filed On 14-08-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC C BENCH : BANGALORE BEFORE SHRI B.R BASKARAN ACCOUNTANT MEMBER ITA NO.1774/BANG/2019 ASSESSMENT YEAR : 2016-17 SRI SHARATH KUMAR PROP : SRUSTI ASSOCIATES NO.1553/3 155/6 HESARAGHATTA MAIN ROAD NEAR WIDIA SCHOOL BUS STOP OPP. KRISHNA CAKE PALACE BENGALURU-560 073. PAN BGNPS 9428 J VS. THE INCOME-TAX OFFICER WARD-6(2)(5) BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI PRANAV KRISHNA ADVOCATE RESPONDENT BY : SHRI GANESH R GHALE ADVOCATE STANDING COUNSEL TO D EPT. DATE OF HEARING : 07.11.2019 DATE OF PRONOUNCEMENT : 29.11.2019 O R D E R PER B.R BASKARAN ACCOUNTANT MEMBER THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 23-05-2019 PASSED BY LD CIT(A)-6 BENGALURU AND IT RELATES TO THE ASSESSMENT YEAR 2016-17. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ADDITION OF RS.19.46 LAKHS MADE BY THE AO BEING THE DIFFERENCE BETWEEN THE TU RNOVER REPORTED BY THE ASSESSEE IN RETURN OF INCOME AND THE TURNOVE R SHOWN IN FORM NO.26AS. ITA NO.1774 /BANG/2019 PAGE 2 OF 5 2. THE ASSESSEE IS A CONTRACTOR SUPPLYING LABOU R/MANPOWER AND ALSO UNDERTAKES GARDEN MAINTENANCE ETC. IN THE RET URN OF INCOME THE ASSESSEE DECLARED TURNOVER OF RS.1 73 37 439/-. THE AO NOTICED THAT THE TURNOVER SHOWN IN FORM NO.26AS WAS RS.1 96 75 871/-. BEFORE AO THE ASSESSEE SUBMITTE D THAT THE DIFFERENCE IN TURNOVER REPRESENTED PF/ESI COLLECTIO NS MADE FROM HIS CLIENTS AND THOSE ITEMS WERE NOT TAKEN AS ASSESSEE S TURNOVER. THE AO NOTICED THAT THE ASSESSEE HAS DEBITED ITS PROFIT AND LOSS ACCOUNT WITH RS.2 53 339/- TOWARDS ESI AND RS.14 52 337/- T OWARDS EPF. FURTHER A SUM OF RS.22 24 598/- WAS SHOWN AS LIABI LITY. ACCORDINGLY THE AO RECAST THE PROFIT AND LOSS ACCO UNT AND ARRIVED AT A DIFFERENCE OF RS.19 46 117/- IN NET PROFIT. T HE AO ADDED THE ABOVE SAID SUM OF RS.19 46 117/- TO THE TOTAL INCOM E OF THE ASSESSEE. THE LD CIT(A) ALSO CONFIRMED THE SAME. 3. BEFORE ME THE LD A.R SUBMITTED THE BREAK-UP DETAILS OF ESI AND EPF AS UNDER:- PARTICULARS ESI EP F EMPLOYER CONTRIBUTION 6 54 958 16 83 47 4 EMPLOYEE CONTRIBUTION 2 53 339 14 52 337 THE LD A.R SUBMITTED THAT THE AMOUNT OF RS.2 53 339 /- AND RS.14 52 337/- REPRESENT SALARY COST OF THE ASSESSE E AND THE SAME WAS SHOWN SEPARATELY IN THE PROFIT AND LOSS ACCOUNT . HE SUBMITTED THAT THE DIFFERENCE BETWEEN THE TURNOVER SHOWN IN P & L ACCOUNT AND FORM 26AS IS RS.23 38 432/- AND THE SAME REPRES ENTS EMPLOYER CONTRIBUTION SHOWN ABOVE I.E. RS.6 54 95 8/- (+) RS.16 83 474 = RS.23 38 432/-. HE FURTHER SUBMITTE D THAT THE AO HAS CONSIDERED EXPENDITURE OF RS.1 49 75 201/- WHIL E RECASTING THE ITA NO.1774 /BANG/2019 PAGE 3 OF 5 PROFIT AND LOSS ACCOUNT WHILE THE ACTUAL EXPENDITU RE CLAIMED BY THE ASSESSEE WAS RS.1 66 92 378/-. ACCORDINGLY HE SUBM ITTED THAT THERE IS NO DIFFERENCE AS PRESUMED BY THE TAX AUTHO RITIES AND ACCORDINGLY PRAYED FOR DELETION OF THE SAME. 4. ON THE CONTRARY THE LD D.R SUBMITTED THAT TH E ASSESSEE HAS FAILED TO OFFER PROPER EXPLANATIONS AND HENCE THE L D CIT(A) WAS CONSTRAINED TO CONFIRM THE ADDITION. 5. HAVING HEARD RIVAL SUBMISSIONS I AM OF THE VIEW THAT THE DIFFERENCE IN TURNOVER SHOWN IN PROFIT AND LOSS ACC OUNT AND FORM NO.26AS WHICH WAS THE BASIS OF MAKING THE IMPUGNED ADDITION NEEDS TO BE RECONCILED. THE ASSESSEE HAS SUBMITTED THAT THE PRINCIPALS HAVE INCLUDED THE CONTRIBUTION TO PF AND ESI IN THE TURNOVER WHILE THE ASSESSEE HAS NOT INCLUDED THE S AME. THUS THERE APPEARS TO BE MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THE DIFFERENCE IN TURNOVER IS A MATTER REQUIRING RECONC ILIATION. BEFORE ME THE ASSESSEE HAS RECONCILED THE DIFFERENCE BUT THE SAME WAS BY WAY OF WRITTEN SUBMISSIONS. NO SUPPORTING MATERIAL WAS PLACED. ACCORDINGLY I AM OF THE VIEW THIS MATTER REQUIRES FRESH EXAMINATION AT THE END OF AO BY DULY CONSIDERING TH E BOOKS OF ACCOUNTS COPIES OF INVOICES ETC. ACCORDINGLY I S ET ASIDE THE ORDER PASSED BY LD CIT(A) AND RESTORE THIS ISSUE TO THE F ILE OF THE AO FOR EXAMINING THIS ISSUE AFRESH. I ALSO DIRECT THE AO TO PREPARE A RECONCILIATION STATEMENT ALONG WITH SUPPORTING MATE RIALS AND FURNISH THEM TO THE AO. THE ASSESSING OFFICER AFT ER EXAMINING THE MATERIALS MAY TAKE APPROPRIATE DECISION IN ACCORDA NCE WITH LAW. ITA NO.1774 /BANG/2019 PAGE 4 OF 5 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29TH NOVEMBER 2019. SD/- (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE DATED THE 29TH NOVEMBER 2019. /VMS/ COPY TO: 1. APPELLANT (S) / CROSS OBJECTOR(S) 2. RESPONDENT(S) 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT BANGALORE